HM Lender Recommendations?

Question

I have a flip property I am purchasing and need some better lender options. Current lenders in the area only offer the option to mortgage the purchase of the property and then do a LOC with 25% down on repairs. I would like to have the option and flexibility of a hard money loan to simplify it, but that is not offered in my area, as I am in a rural and small town setting. Does anyone have an online lender they would recommend that is flipping-friendly and offers hard money loan options?

Vijay Friedman · Answer

@Brett Robberts

Yes, for a flip I’d look for a true hard money/RTL lender instead of a regular mortgage plus LOC setup.

The main thing in your case is the rural/small-town location. Some national hard money lenders will lend there, but they may be more conservative on ARV, leverage, or minimum loan size.

I’d ask lenders upfront:

• Do you lend in rural Nebraska?
• Do you fund both purchase and rehab?
• What is max LTC and max ARV?
• What is the draw process?
• Any minimum loan amount?
• Do you require flip experience?
• How fast can you close?

If the deal has strong ARV support and a clean scope, an online hard money lender may be a better fit than a local mortgage + LOC structure.

Warren Ifergane · Answer

That should be pretty easy if there are nearby comps. Happy to connect.

Erik Estrada · Answer

Hi Brett,

Happy to connect

Frank Pyle · Answer

You are overcomplicating it with the purchase loan plus LOC structure when what you really need is one loan that covers purchase and rehab in draws. On a flip the math is simple if you are all in at say 200k and ARV is 260k you need enough margin to cover 10 to 12 percent interest, 2 to 3 points, holding costs, and still clear at least 15 to 20 percent on total cost or it is not worth the risk. A lot of national lenders will go into rural markets but they will be tighter on ARV comps and experience, so make sure your scope and timeline are dialed in before you apply. I would line up at least two hard money quotes and compare points, draw process, and extension fees because that is where they get you. What is the purchase price, rehab budget, ARV, and how many flips have you done so far. If you want I can take a quick look at the numbers and help you think through a cleaner financing structure and lender fit.

Peter Mckernan · Answer

I think if you increase the search size for lenders (bigger lenders), you can find ones that will give you a little more favorable terms.

Stacy Raskin · Answer

Depending on the property location there are lenders that will potentially do 90% of the purchase price and 100% of the rehab done on draws. It will depend on the property location and borrower credit profile. Rural is pretty hard to get financing on so and generally if you do, it will be lower LTVs. Generally, there are some DSCR loan programs that will do rural at a lower LTV. Fix and flip lending for rural will be more difficult to find. Not sure if you have considered flipping in areas that are not rural.

Matthew Bernal · Answer

Rural markets can definitely limit local lending options, but you’re not stuck with just what’s available nearby. There are national hard money and bridge lenders that fund purchase + rehab in one structure, even in smaller towns.

If you’d like, feel free to share the state and general deal size — I’m happy to point you in the right direction.

Michael Wyatt · Answer

Rural is tough.  You could potentially try Easy Street.  Shoot me the address and I can take a look.